Friday, January 15, 2010
Factoring in major changes to the retirement aspirations of millions of baby boomers is not a phenomenon that is unique to the U.S. As discussed by Ian Cowie in today's Telegraph, the situation may be even worse across the pond as the government is in even more dire fiscal straits, now eyeing state pensions as a way to help square the books.
More than 20 years ago, the fraudster Peter Clowes – who stole thousands of pensioners' savings – told me: "I could have paid them all – if only I had been given more time."Of course, if the British were like us Americans and still had the world's reserve currency along with a natural (if somewhat shaky) source to finance its deficits, it wouldn't be looking inward just yet. When they begin to look inward in Washington D.C. to solve our problems, you'll know that we're really in trouble.
Can't think why that memory came to mind this week when Cabinet minister Harriet Harman proposed scrapping the compulsory retirement age. From the Government's point of view, this change would have two happy effects.
It would cause millions of people to pay taxes for longer and also delay the point at which they ask for state pension promises to be honoured.
As regular readers will know, state pensions in this country are a massive Ponzi scheme which it would be illegal for anyone to operate in the private sector. National Insurance contributions deducted from workers' pay packets this week are used to pay next week's state pensions.
The fund has enormous and rising liabilities but no assets. Don't take my word for it; Nye Bevan – one of the founders of the welfare state – jovially admitted: "The great secret about the National Insurance fund is that there ain't no fund."